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Recommendation to Discuss and Potentially Take Action Concerning the Open Government Commission’s (OGC) Decision Directing that Ordinance Nos. 3227 and 3228 (Relating to Cannabis Businesses) are “Null and Void”, including Without Limitation Any Combination of the Following: (1) Take No Action, thereby Confirming that Ordinance Nos. 3227 and 3228 Remain in Full Force and Effect, (2) Adopt a Motion to Implement the Open Government Commission’s Null-and-Void Decision, thereby Expressing Council’s Concurrence that the Ordinances are Null and Void, (3) Direct Staff to Notice a Public Hearing Concerning the Repeal (if necessary) of Ordinance Nos. 3227 and 3228 and/or the Replacement of Such Ordinances With the Same or Similar Provisions, (4) Direct Staff to Prepare Amendments to the Sunshine Ordinance to Address Concerns Noted in this Agenda Report, including the Exhibit Files, or Raised at the Meeting, or (5) Any Other Related Actions Proposed by Council.
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To: Honorable Mayor and Members of the City Council
From: David L. Rudat, Interim City Manager
EXECUTIVE SUMMARY
Because of the expressed potential for litigation and the associated legal risks concerning the current validity of the two ordinances dealing with cannabis business regulations, Council is meeting in closed session on February 19. Following that closed session, the Council will discuss various options concerning the ordinances. Those options include: (1) Taking no action to implement the Open Government Commission’s decision last year that the two ordinances are null and void, thereby confirming the ordinances in question remain in full force and effect; or (2) Adopting a motion that implements the Open Government Commission’s decision, thereby expressing Council’s concurrence that the two ordinances are null and void. As to the first option, Council could also direct staff to notice a public hearing concerning the repeal and replacement of the two Ordinances (essentially what was on the Council’s January 15, 2019 agenda but addressing additional concerns expressed by the Open Government Commission at its February 4 meeting). As to the second option, Council could direct staff to notice a public hearing concerning the replacement of the two ordinances but, again, addressing, to the extent relevant, the concerns expressed by the Open Government Commission on February 4.
In either case, Council could also direct staff to prepare amendments to the Sunshine Ordinance to address the concerns about certain provisions of the Sunshine Ordinance discussed in this agenda report.
BACKGROUND
Following the decision of the Open Government Decision last year that the agenda title for two proposed ordinances concerning cannabis business regulations did not comply with the requirements of the City’s Sunshine Ordinance, the Commission directed that the two ordinances (Ordinance Nos. 3227 and 3228) were null and void. See Exhibit 1 (Open Government Commission Administrative File, OGC December 17, 2018 Decision). Notwithstanding that the City Attorney’s Office held (and holds) the opinion that the Commission did not have the authority under the City Charter and State law to render ordinances null and void, in January 2019, in order to comply with the intent and spirit of the Commission’s decision, Council was presented with an agenda report that recommended the two ordinances be repealed and new ordinances that essentially tracked the provisions of the two ordinances in question be introduced and adopted. See Exhibit 2 (Council Agenda File, agenda report dated January 15, 2019). Since Councilmember Daysog was required to recuse himself from participating in that decision because of a financial conflict of interest, there was no majority vote to adopt staff’s recommendation. Accordingly, in response to a question, the Council was advised that Ordinance Nos. 3227 and 3228 remain in full force and effect. See Exhibit 2 (Council Agenda File, Agenda Report, dated January 15, 2019, and excerpt of Council minutes from that meeting).
Cannabis business applicants and other members of the community have expressed concern that this result leaves open the possibility of a legal challenge to the ongoing validity of the two Ordinances and any approvals that may flow from the Ordinances. In addition, the Open Government Commission on February 4 sustained a complaint about another violation of the Sunshine Ordinance that the agenda materials for the Council’s January 15 meeting concerning the repeal and replacement of the two Ordinances did not have all relevant material and that the agenda title itself did not adequately inform the public that even if the Council did not take action to repeal and replace the two Ordinances, they would still remain in full force and effect. See Exhibit 1 (Open Government Commission Administrative File, OGC February 4 Decision).
Because of the expressed potential for litigation concerning the current validity of the two Ordinances, Council is meeting in closed session on February 19 to discuss those legal risks. Following that closed session, Council will discuss various options to address this issue. Those options are discussed in this agenda report and include: (1) Taking no action to implement the Open Government Commission’s decision that the two Ordinances are null and void, thereby confirming the Ordinances in question remain in full force and effect, or (2) Adopting a motion that implements the Open Government Commission’s decision, thereby expressing Council’s concurrence that the two Ordinances are null and void.
DISCUSSION
Option 1: Take no action to implement the Open Government Commission decision.
Council could take no action to implement the decision of the Open Government Commission’s decision of last year, thereby confirming Ordinance Nos. 3227 and 3228 remain in full force and effect. That could leave the validity of those Ordinances, and any approvals granted under those Ordinances, open to a legal challenge. To address this potential pitfall, the Council could direct staff to schedule a public hearing (in March) for the Council to consider repealing Ordinance Nos. 3227 and 3228 but introducing and adopting two new ordinances that would track all or some of the provisions of the two Ordinances in question, similar to what was presented to the Council on January 15 but addressing the concerns expressed by the Open Government Commission at its February 4 meeting. See Exhibit 1 (Open Government Commission Administrative File, OGC February 4, 2019 Decision).
Additionally, if the two new ordinances were introduced and adopted with the same provisions that currently provide for no more than four dispensaries in the City (two east of Grand Avenue, two west of Grand Avenue), the Council could direct staff to take a phased approach to implementing the new four-dispensary cap. For example, the Council could direct staff to limit the City’s proposed Requests for Proposals to just two additional proposals in the first phase (as there is already one application in the pipeline), and later release the final RFP at a date certain or after staff has had a chance to report back to Council. In sum, such a phased approach could be implemented without amending the cap.
Option 2: Adopt a motion to implement the Open Government Commission’s decision, thereby expressing Council’s concurrence that Ordinance Nos. 3227 and 3228 are null and void.
The Sunshine Ordinance currently provides that as a remedy for a violation of that Ordinance, the Open Government Commission may render null and void the action in question. See § 2-93.8a., Alameda Municipal Code. Because the Commission concluded that the Sunshine Ordinance had been violated on grounds that the October 16, 2018 agenda title for the two Ordinances did not adequately inform the public about some of the provisions that the Council included in the Ordinance when they were introduced (and later adopted), the Open Government Commission directed the Council’s decision to adopt the two Ordinances null and void. See Exhibit 1 (Open Government Commission Administrative File, OGC Decision, December 17, 2018).
The City Attorney’s Office has made its opinion plain in its confidential memo to the Council and its non-confidential memo to Open Government Commission (see Exhibit 1, [Open Government Commission Administrative File, City Attorney Memo dated December 10, 2018]) that the Commission did not have the legal authority under the City Charter or State law to render a Council adopted ordinance null and void. Nonetheless, the Council could move to implement the Open Government Commission’s decision that Ordinance Nos. 3227 and 3228 are null and void. Following that action, Council could also direct staff to notice a public hearing concerning the replacement of the two Ordinances consistent with the Open Government Commission’s February 4, 2019 decision. See Exhibit 1 (Open Government Commission Administrative File, OGC Decision February 4, 2019). As described above, Council would then have the opportunity to include all or just some of the provisions of Ordinance Nos. 3227 and 3228 in the new ordinances.
As also described above, Council could also provide direction concerning the RFP process.
Direct staff to prepare amendments to the Sunshine Ordinance.
Regardless of the action, if any, the Council takes on these matters, staff recommends Council direct staff to prepare amendments to the Sunshine Ordinance concerning the Open Government Commission’s process to render legislative acts of the City Council null and void and/or to overturn decisions of City staff, for example, the disclosure of public records, without review by the City Council. As the watchdog for the City to ensure the public is informed about City business and has access to public information, the Commission plays a crucial role in government transparency. That role should not be diminished.
On the other hand, the City Council is vested under State law and the City Charter with certain powers that may not be delegated to advisory, appointed bodies and those powers must be protected. Moreover, certain decisions of the Open Government Commission could pose legal risks and potential impacts to the General Fund which decisions only the City Council, as the community elected officials, must make after receiving legal advice from the City Attorney’s Office.
The Sunshine Ordinance could be amended to address these concerns in order to avoid a repeat of the issues that have surfaced, for the first time since the Ordinance’s adoption in 2012, in the last few months.
FINANCIAL IMPACT
The actions described in this agenda report will have no direct financial impact on the City’s General Fund.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The actions described in this agenda report are consistent with the provisions of the Municipal Code.
ENVIRONMENTAL REVIEW
None of the actions described in this agenda repot are “projects” under the California Environmental Quality Act (CEQA) because they represent general policy and procedure making and therefore no environmental review is required. CEQA Guidelines section 15378(b)(2).
RECOMMENDATION
Discuss and Potentially take Action Concerning the Decision of the Open Government Commission’s Decision Directing that Ordinance Nos. 3227 and 3228 (Relating to Cannabis Businesses) are “Null and Void”, Including Without Limitation All or Some Combination of the Following: (1) Take No Action, thereby Confirming that Ordinance Nos. 3227 and 3228 Remain in Full Force and Effect, (2) Adopt a Motion to Implement the Open Government Commission’s Null-and-Void Decision, thereby Expressing Council’s Concurrence that the Ordinances are Null and Void, (3) Direct Staff to Notice a Public Hearing Concerning the Repeal (if necessary) of Ordinance Nos. 3227 and 3228 and/or the Replacement of such Ordinances With the Same or Similar Provisions, (4) Direct Staff to Prepare Amendments to the Sunshine Ordinance to Address Concerns Noted in this Agenda Report, including the Exhibit Files, or Raised at the Meeting, or (5) Any Other Related Actions Proposed by Council.
Respectfully submitted,
David L. Rudat, Interim City Manager
By,
Michael H. Roush, Interim City Attorney
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. OGC Administrative File (Case Nos. 18-02 and 19-01).
2. January 15, 2019 Council Agenda, Staff Report and Excerpted Minutes